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Basic Question 1 of 19

What is the bond equivalent yield of a 7% annual-pay bond for semi-annual compounding?

A. 6.882%
B. 7.000%
C. 7.123%

User Contributed Comments 15

User Comment
danlan Must be <7%, so A
Winner how can you do this using a BAII without using this formula.
ramtor use iconv funtion
sp24 This video shows how do do use this function:

Take a look at C. 2.!
tschakawaka from annual to semi-annual => interest has to get smaller due to compound interest effect - no calculation needed
chamad Using BAII ----ICONV----EFF=7 C/Y=2---CPT NOM=6.88
eb2568 awesome chamad, thanks for the tip!!
devourb what about hp12c?
moneyguy Thanks, chamad!! Pretty darn easy now!
2014 Thanks Chamad
johntan1979 Yeah, so many formulas to remember, ICONV function really helps!

jonan203 hp12c:

1.07 <enter>
.5 <y^x>
1 <minus>
2 <times>
jrojasut09 ICONV function is the way to go thanks @chamad
khalifa92 better understand both ways formula and calculator
UcheSam There is inverse relationship between BEY and periodicity.
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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!


Learning Outcome Statements

calculate annual yield on a bond for varying compounding periods in a year;

CFA® 2024 Level I Curriculum, Volume 4, Module 44.